Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.6 |
| P/S | 7.7 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 10.9x
- ▸PEG: 0.35
- ▸Attractively valued
FMAO · Why this verdict
Why Farmers & Merchants Bancorp, In (FMAO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Farmers & Merchants Bancorp is a cheaply valued small-cap bank (forward P/E 11.2x, PEG 0.36) with a perfect four-quarter beat streak, but the stock trades 14.7% above the analyst target near its 52-week high while insiders have been heavy sellers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Margins are strong at 32% and the Piotroski F-Score is 7/9, though return on equity is modest and there is no competitive moat. Quality breakdown | Piotroski F-Score stays at 7 or higher while quality improves above 6.0. | →Stable |
| CounterMargin figures for banks are inflated by how revenue is defined, and ROE (component 3.8) shows weak actual profitability on equity. | ||
A forward P/E of 11.2x and PEG of 0.36 make the shares attractively valued relative to earnings growth. Valuation breakdown | Forward P/E stays below 13x as earnings keep growing over the next 12 months. | →Stable |
| CounterThe stock is only 0.4% from its 52-week high, so much of the cheapness has already been re-rated, and low ROE and no moat justify a bank multiple. | ||
EPS beat estimates in all four recent quarters with an average surprise of 11.07%, including $0.86 versus $0.67 in July. Earnings | EPS continues to beat consensus over the next four reports. | ↑Improving |
| CounterA bank this small is covered by few analysts, so repeated beats may reflect stale estimates rather than durable outperformance. | ||
Insiders sold about $1.75M of stock across 18 sales in 90 days against a single $10,341 purchase, a bearish signal from people who know the bank best. Insider | Insider selling slows and net insider flow turns neutral or positive over the next two quarters. | →Stable |
| CounterExecutive sales on a stock near its high may be routine diversification or scheduled plans rather than a view on fundamentals. | ||
At $36.54 the stock trades 14.7% above the $31.17 analyst target, so the sell side sees no remaining upside. Upside pct | Analyst targets are raised above the current price as earnings keep beating. | →Stable |
| CounterAnalysts may be slow to raise targets after a 4-for-4 beat streak and a golden-cross breakout, so the price may be leading correctly. | ||
Margins are strong at 32% and the Piotroski F-Score is 7/9, though return on equity is modest and there is no competitive moat.
→StableQuality breakdown
- Expectation
- Piotroski F-Score stays at 7 or higher while quality improves above 6.0.
CounterMargin figures for banks are inflated by how revenue is defined, and ROE (component 3.8) shows weak actual profitability on equity.
A forward P/E of 11.2x and PEG of 0.36 make the shares attractively valued relative to earnings growth.
→StableValuation breakdown
- Expectation
- Forward P/E stays below 13x as earnings keep growing over the next 12 months.
CounterThe stock is only 0.4% from its 52-week high, so much of the cheapness has already been re-rated, and low ROE and no moat justify a bank multiple.
EPS beat estimates in all four recent quarters with an average surprise of 11.07%, including $0.86 versus $0.67 in July.
↑ImprovingEarnings
- Expectation
- EPS continues to beat consensus over the next four reports.
CounterA bank this small is covered by few analysts, so repeated beats may reflect stale estimates rather than durable outperformance.
Insiders sold about $1.75M of stock across 18 sales in 90 days against a single $10,341 purchase, a bearish signal from people who know the bank best.
→StableInsider
- Expectation
- Insider selling slows and net insider flow turns neutral or positive over the next two quarters.
CounterExecutive sales on a stock near its high may be routine diversification or scheduled plans rather than a view on fundamentals.
At $36.54 the stock trades 14.7% above the $31.17 analyst target, so the sell side sees no remaining upside.
→StableUpside pct
- Expectation
- Analyst targets are raised above the current price as earnings keep beating.
CounterAnalysts may be slow to raise targets after a 4-for-4 beat streak and a golden-cross breakout, so the price may be leading correctly.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.8 |
| ROA | 0.8 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Strong margins: 32%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 8.2 |
Momentum
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 9.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.7 |
| Analyst rating | 5.0 |
| Price target | 5.4 |
- ▸LLM news sentiment: +0.34 (n=3)
Insider
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.4 |
| holder change | 7.6 |
| notable moves | 7.0 |
- ▸Notable insider selling — $1,346,959 (0.268% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.8 |
| quality rank | 5.6 |
| growth rank | 5.0 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 2.4 |
| 52w position | 9.5 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 6.2 |
| volatility | 5.2 |
| put call | 10.0 |
| implied vol | 3.7 |
| beta | 8.2 |
| news risk | 5.5 |
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.2 |
| dividend safety | 5.5 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.7>=5.5
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.50
- EARNINGS_PROXIMITY:105d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (1)
- INSIDER:0.27%=MODERATE
Reward-to-Risk
-1.43
Upside
-12.5%
Downside
8.7%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.7>=5.5. Top dim: Value at 7.7; weakest: Technical at 4.2. No conviction either direction.
The strongest dimensions are Value at 7.7, Momentum at 7.7, and Catalyst at 7.0; the weakest are Technical at 4.2, Insider at 5.0, and Peer rank at 5.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation Vs Growth
Trip ifForward P/E rises above 14x from the current 11.2x.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Heavy Insider Selling
Trip ifInsider sales total more than $3M over 90 days from the current $1.75M.
- P4Price Above Analyst Target
Trip ifAnalyst target rises above $40.19, at least 10% above the current $36.54 price.
- P5Solid Margins Sound Fundamentals
Trip ifPiotroski F-Score falls below 5 out of 9 from the current 7.